Wednesday, May 13, 2020

Fuel Lobby Looks for Independent Review as it Accuses Suppliers of Profiteering During Lockdown

Lower Oil Costs Not Being Passed on to Consumers
Shipping News Feature

UK – FairFuelUK, the body which has lobbied hard on successive administrations to reduce, or at least maintain, the level of fuel duty must be concerned that, with the whiff of higher taxes post virus in the air, plus the government's avowed intent to promote cycling and walking, that its next battle may be the hardest.

For now however the organisation has another windmill to take a tilt at as, whilst it has openly praised the government’s various financial measures to help businesses, employers, and employees, the behaviour of the fuel suppliers it has condemned as reprehensible. FairFuelUK says the unchecked big oil brands and their fuel supply chain wholesalers have deliberately profiteered during the crisis.

It says the magnitude of the profiteering is on a scale that commands independent investigation, saying up till now the Competition and Markets Authority and the government at large have ignored this. It points out that in the 3 months between December 2019 to February 2020 average pump prices against average wholesale prices including all taxes, led to profit for petrol at 11.5p and diesel 12.6p per litre.

As against this, in the period of lockdown, when the cost of oil crashed 53% and wholesale petrol fell 21% (diesel -17%), petrol profits rocketed 124% and diesel was up by 71%, and it has published a table giving the comparative profit levels.

It claims this equates to the cost to fill an average family car during lockdown rising £7.86 more than FairFuelUK deems necessary, whilst smaller independent garages were victims too, as the record falls in oil prices were never passed onto them fairly, and it believes now many of these SMEs are struggling and destined to go under. Howard Cox, FairFuelUK’s founder said:

“Our campaign supporters, including essential workers, nurses, carers, and small businesses are furious that March’s oil price crash has not been honestly reflected in what they pay at the pumps. Petrol should never be more than 96p with diesel 102p max, but average filling-up prices across the UK are nonetheless 10p higher. Each day these unprincipled businesses wallets get fatter, it gets even more critical that an independent PumpWatch pricing watchdog be in place, to halt this chronic profiteering.”

After further investigation FairFuelUK quoted from a major fuel wholesaler NWF Fuels own trading report which said:

“Furthermore, the Fuels business and its customers have benefited from a significant fall in oil prices over recent weeks which will make material contribution to profits in the short term. Demand for heating oil increased significantly in March and into April combined with a deep, sharp and sustained fall in the oil price that has enhanced margins.”

Quentin Willson of FairFuelUK joined the call saying the big fuel companies should do their part to lower the cost of living, pass on savings to those who need it most and support the smaller independent forecourts, and that boasts of ‘enhanced margins’ was heartless during such terrible times, whilst supporter Robert Halfon MP commented:

“In this time of national emergency the big companies should step up to the plate. They must help the Government cut the cost of living and pass on quickly the fall in international oil prices to those who rely on this fuel. When coronavirus is over, those who helped the war effort will be judged. Those who profiteered unnecessarily will face harsh consequences.”